Treated but not healed: a look at Nairobi’s healthcare system Opportunities for the private sector Written by: Kennedy Mukuna Advisor: Michael Woolcock Section leader: Michael Walton March 18, 2019 Submitted in fulfillment of the requirements for the degree of Master in Public Administration in International Development, John F. Kennedy School of Government, Harvard University 1 Acknowledgements This policy analysis would not have been possible without the guidance and great support of Prof Michael Walton, Professor Ryan Sheely and Prof Michael Woolcock at Harvard Kennedy School of Government, all of who contributed significantly to the overall direction and structure of the analysis. I would like to thank them greatly for their commitment, contributions and insights during the writing process. I would like to thank the team at afyakit, who very generously offered insights and data which was valuable in the primary research. I additionally thank Melvine Ouyo (HKS) and Dr Moses Owino, the Sub-County Health Management Lead for Embakasi County for their time, insight and kind introductions. It would be unfair not to acknowledge Shreya Chatterjee, Aalok Panday, Michael Lopesciolo and Daniela Paz whose great ideas from past work together shaped greatly my thought going into this exercise. Lastly, I am grateful to God for good health, clear mind and the opportunity to explore this topic. This paper is dedicated to my brothers, Tom and Iggy, with whom I have faced the sordid results of poor care delivery in Nairobi. In their unique way, they remind me of why this is an important issue to us as a family. May God bless them for their unending motivation. 2 Contents Executive summary ..................................................................................................................................... 4 Motivation ................................................................................................................................................... 5 Problem statement .................................................................................................................................... 12 Demand side: variable cost of care and low awareness of technical quality of care offered ............... 12 Supply side: staff quality, staff motivation, weak drug supply networks ............................................. 12 afyakit: the client ................................................................................................................................... 13 Institutional context .............................................................................................................................. 15 Methodology: Quantitative and Qualitative Research ............................................................................. 18 Quantitative research ............................................................................................................................ 18 Qualitative approach ............................................................................................................................. 18 Findings ................................................................................................................................................. 19 Causal Diagnostics .................................................................................................................................... 22 Principal-agent issues – misalignment of incentives ........................................................................ 22 Inadequate supply of skilled labor .................................................................................................... 23 Low investment in acquisition and training on health management information systems (HMIS). ............................................................................................................................................................ 24 Weak drug price information channels ............................................................................................ 25 Options for afyakit ..................................................................................................................................... 26 Consumer facing drug group purchasing organization with public price information portal ........... 27 Digital supervision toolkit with public ranking of hospitals by technical performance ..................... 29 Evaluation of possible options for afyakit ................................................................................................ 30 Digitized supervision toolkit and public ranking of hospitals by competency areas .......................... 31 A consumer-facing group purchasing organization for drugs and equipment augmented by a clear drug prices transparency campaign ...................................................................................................... 36 Recommendations and Conclusion .......................................................................................................... 41 References ............................................................................................................................................. 42 Appendix 1: stakeholder analysis .......................................................................................................... 44 Appendix 2: State of healthcare in Nairobi ........................................................................................... 46 Appendix 3: Patient healthcare demand trends ................................................................................... 47 Key illnesses ....................................................................................................................................... 47 Appendix 4: Satisfaction and selection of healthcare services ......................................................... 50 Appendix 3: Staff quality and motivation ............................................................................................. 50 Appendix 5: Drugs: high cost and weak drug delivery ......................................................................... 54 3 Figure 1: Investment in healthcare is associated with better health outcomes __________________________________ 6 Figure 4: Nairobi has average health outcomes compared to other counties in Kenya ____________________________ 7 Figure 8: Nairobi spends over 13 times the national average on malaria, but the malaria prevalence rates are average compared to counties spending 10 - 15 times less. _______________________________________________________ 8 Figure 5: Nairobi has the third worst maternal statistics of all counties in Kenya _______________________________ 8 Figure 6: Nairobi has high healthcare service utilization rate _____________________________________________ 10 Figure 7,7: High average lengths of stay in government hospitals greatly impedes admission capability _____________ 11 Figure 10: ICT and process innovations improve the organizational performance of hospitals _____________________ 32 Figure 9: Bed Capacity in Health Facilities in Nairobi __________________________________________________ 56 Equation 1: Healthcare Production Function (Romley and Sood, 2013) ______________________________________ 46 Table 1:Nairobi's maternal care utilization rates are high _________________________________________________ 9 Table 2:Nairobi residents have higher levels of health awareness ___________________________________________ 9 Table 14: Summarized change narrative for a digital supervision toolkit ____________________________________ 33 Table 15: Administrative feasibility chart for a digital supervision kit _______________________________________ 34 Table 16: Summarized change narrative for a consumer-facing GPO _______________________________________ 38 Table 17: Administrative feasibility chart for a consumer-facing GPO ______________________________________ 38 Table 3: Norms and incentive structure of the national health stakeholders __________________________________ 45 Table 4:Norms and incentives of healthcare stakeholders at the county level _________________________________ 45 Table 5: Breakdown of cases handled at private health facilities ___________________________________________ 47 Table 6:Public facilities: illness breakdown __________________________________________________________ 47 Table 7:Incentives by staff cadre __________________________________________________________________ 50 Table 8: Hours worked on average by healthcare professionals ___________________________________________ 51 Table 9: Distrinbution of healthcare staff across health facilities __________________________________________ 53 Table 10: state of service delivery in health facilities in Kenya ____________________________________________ 53 Table 11:Facilities show low levels of guideline observation ______________________________________________ 54 Table 12: The cost of drugs is highly inflated especially for locally produced drugs _____________________________ 54 Table 13: The cost of drugs for patients is differentiated along facility ownership type and invariably costly across board 55 4 Executive summary Nairobi is the center of economic production in Kenya, within over 20% of Kenya’s GDP generated within its 700 square kilometers. The county’s investment in healthcare is equally as impressive with 32% of the country’s doctors based in the county and upto its spending on disease programs upto 13 times higher than other counties. Health